Summary |
Non-banking financial system has been in existence from pre-independence days in India. From being practiced in an informal way, the non-banking financial players became more formalized financial units from 1940s. Till take sixties, the formal banking system was considered as credit delivery and scheme implementation agencies. In 1961, an attempt was made to bring the non-banking finance units into loose regulatory framework. The non-banking credit delivery gained importance in the late 70’s and become more integrated into credit delivery mechanism in the late 80’s. The Bhabatosh Datta study group (1971), James raj study group (1975), Chakravarthy committee (1987) and Narashimham committee (1991) were the important committees to suggest transformation of unregulated non-banking financial sector into regulated one. The most notable of these committees is the Narashimham committee which recommended for complete overhaul of existing regulatory framework for banking sector and bringing the non-banking finance sector into a systemic and tighter regulatory framework.
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